Atlanta-based Gold Kist Inc. has agreed to a $1.1 billion takeover by Pilgrim's Pride Corp., Pittsburg, Texas. The combination will create the world's largest chicken company in terms of production, displacing Tyson Foods, and the third-largest U.S. animal protein company by revenue, the companies said.
Gold Kist's directors rebuked an earlier Pilgrim's Pride offer, calling it hostile. But in early December they agreed to a buyout of $21 a share, $1 a share more than the earlier bid, making the deal worth $1.1 billion, plus the assumption of approximately $144 million of Gold Kist debt.
Pilgrim's Pride, which closed its fiscal 2006 on Sept. 30, 2006, had annual sales of $5.2 billion, a 7.6-percent drop from FY2005, and a net loss of $34 million (versus a 2005 profit of $265 million). Gold Kist, with an identical fiscal year, had nearly identical fortunes: a 7.7 percent drop in sales (to $2.1 billion) and a $17.7 million net loss (versus $112 million profit in 2005).
Pilgrim's Pride earlier said it would not close facilities nor lay off workers after a merger. Pilgrim's Pride has said the combined operation will save $50 million a year, mostly from combining production, distribution and purchasing.
Gold Kist in November dedicated a $70 million expansion of its Live Oak, Fla., poultry processing facility and in September a $30 million expansion in Guntersville, Ala.